He said/he said: Danielson sues; Minor speaks out

Halsey Minor (left) and Lee Danielson (right) were friendlier when they broke ground on the Landmark Hotel on March 11, 2008 with Mayor Dave Norris.FILE PHOTO BY JAY KUHLMANN

After going quiet for nearly six months, Internet entrepreneur Halsey Minor is speaking up again about his stalled Landmark Hotel project–- including a new lawsuit he faces from the project's former developer, Lee Danielson. Minor says the other players in the project are all unfairly and inaccurately blaming him.

"I've heard all this junk from Lee, and the bank, and the contractors, and it's just not true," says Minor. "It's not my responsibility, it's theirs."

Minor's remarks come on the heels of a $5.75 million lawsuit from Danielson, whom Minor fired in November, accusing Minor of unlawfully breaking his contract with him as the Landmark's developer–- a counter to Minor's pending suit against Danielson and against federally-seized Atlanta-based lender Silverton Bank. Among the allegations Danielson makes in his claim in Charlottesville Circuit Court is that Minor demanded that Danielson find someone to buy out Minor's interest, a claim Danielson supports by producing an October 31, 2008 e-mail from Minor.

"Lee, I said by all means try to line up a buyer," wrote Minor, adding insultingly, "I have my doubts that this will happen given your difficulty raising money in a white hot market." The e-mail concluded, "I am certainly open to a buyer if one exists."

Minor says that Danielson simply misunderstood what was intended as a sarcastic joke. "I never said I was going to sell," says Minor. "I was being humorous.

"The idea of raising the kind of money I put into this project in this economy is laughable," Minor continues. "It's like asking, 'If you could sell your car for a million dollars, would you want to sell your car?' Sure you would, if you could find someone dumb enough to make the deal."

Danielson says it wasn't possible to detect vocal inflection as all their communications were conducted over e-mail, Minor's proposition never seemed like a joke to him.

"I never thought he was kidding," says Danielson. "When he said to find a buyer 'by all means,' I didn't think he was kidding, and I have witnesses who didn't think he was kidding."

Danielson also alleges in his suit that Minor green-lighted a penthouse bar that increased the construction budget by $2.36 million. If true, this may have violated the loan agreement with Silverton Bank and could explain why the bank withheld a $1.1 million loan payout, halting the project in November, three months before work stopped indefinitely.

Minor admits he did sign off on the top-level bar, but he says the change cost should have been nominal.

"All it took to have the penthouse restaurant was to move some equipment on the roof aside, and that was only about $800,000 more," says Minor. "The real cost overrun was that Lee didn't seek bids, and the bank stopped paying. That led to an army of people, starting with Lee, looking to get paid before the project stopped."

While Danielson admits that the penthouse restaurant was his idea, he say it was ultimately Minor's decision.

"He signed off on everything," says Danielson, "and I have the documentation to prove it in court."

Still, Minor says Danielson isn't the only culprit in the Landmark' debacle. Minor also blames Silverton Bank, which Minor says he chose largely for its stability, after getting bids from Wachovia and Virginia National.

"I sat down with their guy in charge of hospitality lending," says Minor, "and he told me they hadn't had a project go bad in 27 years."

Minor continued to feel good about the agreement until November, when he says Silverton didn't come through with a $1.1 million loan payment because, he alleges, the bank's finances were "constantly on edge." When Silverton was taken over by the Federal Deposit Insurance Commission earlier this month, Minor says he felt no sense of vindication for speaking out, but plenty of anger.

"When the FDIC got in there," says Minor, "they found that 179 of their projects had gone bad. They lied to me."

A look at the most recent report of condition Silverton filed with the FDIC reveals that as of March 31, Silverton had $168.4 million in bad loans.

A voicemail left at office number for the official Minor names was not returned at post time, and Silverton spokesperson Cristi Kirisits tells the Hook, "I think Mr. Minor must be mistaken."

Whoever it was defending Silverton's solvency, Landmark was supposed to be completed by this summer. But despite a recently rebricked Mall and a soon-to-open Urban Outfitters shop, the 11-level concrete hotel shell stands silent. Minor says there is a silver lining to Silverton's fall, as he believes the law will be on his side against his adversaries.

"Since they so maimed and wreaked havoc on this project," says Minor, "it's going to be easy for me to get out of the deal and go find a better one."

18 comments

Sue May 15th, 2009 | 8:09pm

Wonder what they would do if they were told --hypothetically-- that they had one day to live --is this the way they would chose to spend it ?

Bob May 15th, 2009 | 10:11pm

A) I agree with Sue B) people with personality disorders blame others, are adept at manipulating other people, have the ability to zero in on other people's weakness's, are irresponsible, and basically have no soul, therefore, stride through life wrecking havoc with people's lives. Mr. Minor should be very careful about blaming all of those subcontractors.....some are Charlottesvilles finest and the contractor, Clancy & Theys, was one of the most professional outfit ever to hit town....Mr. Minor reveals his motivations when he says "it's going to be easy for me to get out of the deal and go get a better one."

First off, hats off to Lindsay, who's done an unbelievable job covering this mess - way better than anyone else in town. And now, some other thoughts:

- No way this will be done by 2011. We've got at least another year in court before we can figure out who owns the damn thing, and no one involved is in any particular rush because they need the economy to turn around before the...
- Ramada opens up. Yep, the ceiling heights are too low for anything but a hotel. So no mixed use after the first 2 floors because of the 7.5 or 8 foot ceilings. No class 1 office space, no retail space, no high end condos, and (unbelievably) no luxury hotel rooms. So everyone involved is going to have to take a bath before this makes any economic sense. A decent hotel, but don't stay up wondering when you'll see it in Travel & Leisure.
- A provocative thought here: maybe the city was right to float the Omni for all those years. Look at the success of our downtown relative to, maybe Burlington, VT, Or Boulder, CO, and who else? We've really got a great situation here, it's fun and thriving and growing, so maybe those nursing pains allowed the mall to survive and have ultimately made the city money. Life's complicated, maybe the Omni loans were the best of the bad alternatives. Having said that, the city should run screaming away from anything to do with this mess, unless they're deeded the land and have to remove the structure.

colfer May 19th, 2009 | 6:23am

It *would* make a nice park!

The Lorax May 21st, 2009 | 10:00pm

- A provocative thought here: maybe the city was right to float the Omni for all those years. Look at the success of our downtown relative to, maybe Burlington, VT, Or Boulder, CO, and who else?

It provocative alright. But you obviously don't know the first thing about the Pearl Street Mall in Boulder if you believe this. I have lived in both places and the difference between the two is like night and day. The downtown area of Boulder is a thriving economic area where as the Charlottesville mall is riddled with business closings and vacancies.

FWIW...I'll take a night at the St. Julien spa at the end of the mall in Boulder over the Omni anyday.

Vertico May 22nd, 2009 | 10:31am

Has anyone else seen those signs on the windows of the job site? Very funny and worth a look!!!

It goes something like this:

Halsey Minor's failed attempt at an erection.

Pete May 16th, 2009 | 8:21am

This is the reason people end up in court.Mr.Minor is referring to a different lender when he says "it's going to be easy for me to get out of this deal and go to another one",and he should be a little less flip about the contractors'but I think he is mostly referring to Mr. Danielson ,because if he can't hear some amount of sarcasm in that e-mail he should be sent down the road. Good Lord!

Pete Deer May 17th, 2009 | 8:32am

It looks like this Minor boy is using the Bart Simpson defense; "I didn't do it. You didn't see me do it. It's someone else's fault. You can't prove I did anything wrong."
Spoiled rich kids who go broke through their own stupidity and hubris are really quite entertaining...other than all of the economic damage they can do. And this boy thinks he's going to save horse racing?
Now I know the sport of kings days are numbered...

Pete Deer

Sick Of The Local Rambos May 17th, 2009 | 11:16am

Outskirts Guy, I will put $1,000 on the summer/fall of 2011. And it will only be finished then on the city taxpayer's dime. The city simply needs a little time to let the taxpayers forgot about the $7 million brick adventure just forced down their throats.

ThatGrrl May 18th, 2009 | 9:56am

Sick of the Local Rambos, no one has forgotten how the city had to take over completion of The Omni. The memories of C-ville citizens stretch waaaay further back than bricking the mall. It simply isn't possible that the city council could ever quietly take over the Minor project. It would only be done over the extremely loud and strenuous objections of people who clearly remember going down this very path before.

Maybe we need a "no new hotels on the downtown mall" ordinance. Those projects just don't seem to end well for the city.

Barbara Nordin May 18th, 2009 | 6:12am

Pete, two things.
1. Yes, there's sarcasm in ONE SENTENCE of the following three-sentence e-mail:

Ã¢â?¬Å?Lee, I said by all means try to line up a buyer,” wrote Minor, adding insultingly, Ã¢â?¬Å?I have my doubts that this will happen given your difficulty raising money in a white hot market.” The e-mail concluded, Ã¢â?¬Å?I am certainly open to a buyer if one exists.”

But there's no hint of sarcasm in either "I said by all means to try to line up a buyer" or "I am certainly open to a buyer if one exists."

quote: "It simply isn’t possible that the city council could ever quietly take over the Minor project."

It wont come quietly or covertly. It will come with the usual preamble... "It's in the best interest of the city, and especially the mall, that we step in and finish this hotel! Blah, blah, blah!"

The problem is the fact that the word "we" is the taxpayers, as they spend our money again. The taxpayers won't have any say in the matter.

colfer May 18th, 2009 | 2:30pm

The gov't will be selling the loan, since the bank failed, for "cents on the dollar." Bid on it and you you can decide. That is, if Minor loses the lawsuit. Otherwise you get nothing. That's the bet, you can speculate on it for real.

Mike Wiszowski May 20th, 2009 | 1:02pm

What kind of self respecting businessman sends an email with a sarcastic tone without the assistance of emoticons or smileys??

surely this would of saved him a bunch of grief now-a-days

Ã¢â?¬Å?I have my doubts that this will happen given your difficulty raising money in a white hot market.” The e-mail concluded, Ã¢â?¬Å?I am certainly open to a buyer if one exists >: P .”

tater salad May 21st, 2009 | 8:28pm

Halsey Minor should have kept the project going with his own money and sued for equity. You can't stop making mortgage payments because the roof leaks.